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2015 (10) TMI 2252 - AT - Income TaxShort deduction of tax at source - assessee in default - whether as per the terms of agreement with the FTCs Doctors, the tax was liable to be deducted as per section 194J of the Act or as per section 192? - Held that:- FTCs Doctors cannot be construed as employees of the assessee hospital but are independent Consultants, who undertake risk and reward of their medical profession. Mere presence of a clause prohibiting rendering of service to competing hospital would not alter the nature of professional services rendered by the FTCs Doctors. Therefore we hold that the payments made to the FTCs Doctors are in the nature of professional fees liable for deduction of tax at source in terms of section 194J of the Act and that there does not exist any employer-employee relationship so as to invoke the provisions of section 192 of the Act. Consequently, on this aspect assessee has to succeed. Factually speaking, in the present case on the basis of the reading of the terms of agreement with FTCs Doctors and in the light of the judgment of the Hon'ble Bombay High Court in the case of Grant Medical Foundation (2015 (2) TMI 457 - BOMBAY HIGH COURT), it has to be held that no employer-employee relationship subsist between assessee hospital and the FTCs Doctors. Thus lower authorities have erred in treating the assessee as an assessee in default within the meaning of section 201(1) of the Act qua the payment of professional fee to FTCs Doctors. - Decided in favour of assessee. Payment made by the assessee towards annual maintenance of the machineries - TDS u/s 194C OR 194J - Held that:- Annual Maintenance Contracts (AMC) of medicale quipments machines etc. is not in the nature of professional or technical services as construed under the provisions of Section 194J of the Act - Tax has been rightly deducted by assessee on the annual maintenance charges u/s 194C of the Act. Consequently, it is held that the assessee cannot be deemed to be an "assessee in default" within the meaning of section 201(1) of the Act. Consequently, no interest under section 201(1A) of the I.T. Act is leviable.- Decided in favour of assessee. Tax deductible at source on payments made for pest control expenses - TDS u/s 194C OR 194J - Held that:- CIT(A) has correctly held that the payment of Pest control charges do not involve rendering of any technical services by the recipient and accordingly the assessee was right in deducting tax at source u/s.194C of the Act. The order of the CIT(A) on this aspect is also affirmed.- Decided in favour of assessee.
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